Audio By Carbonatix
A couple of years ago, we ran a feature story about GlobeTel, a company that was supposedly going to deploy blimp-like satellites across the country and beam down internet signals. There were a few problems with the scheme: building hi-tech airships seemed a job more suited for big aerotech companies rather than a Pembroke Pines startup; wi-fi was actually proliferating at the time, making this whole venture obsolete; and the “stratellites” being peddled actually looked like giant garbage bags sailing through the air with all the grace of a remote-controlled toy.
In subsequent years, as company principals were getting in trouble with the law, GlobeTel changed its name to Sanswire (http://www.sanswire.com/), was taken over by the company’s in-house lawyer, and and claimed to be shifting its business model, developing the stratellites for border control applications instead. Meanwhile, investors had become wary.
Today, the FBI announced that GlobeTel’s CEO, Timothy Huff, has been indicted on 16 counts — wire fraud and related charges. He pled not guilty. The full press release is posted after the jump.
We’d dig into this a tad more, but it’s late in the day, people aren’t answering phones, and we’ve got a turkey to baste. Happy Thanksgiving and gobble gobble!
From the FBI:
Former Chief Financial Officer of GlobeTel Communications Corporation Arraigned
Jeffrey
H. Sloman, Acting United States Attorney for the Southern District of
Florida, Daniel W. Auer, Special Agent in Charge, Internal Revenue
Service, Criminal Investigation Division, and John V. Gillies, Special
Agent in Charge, Federal Bureau of Investigation, Miami Field Office,
announced that defendant Timothy Huff was arraigned today before
Magistrate Judge James M. Hopkins. He pled not guilty to the charges. A
trial date has not yet been scheduled.
On
October 29, 2009, Huff was named in a 16-count Indictment, charging him
with conspiracy to commit securities fraud, falsify certified financial
reports, commit wire fraud, and making false statements to the
company’s outside auditor, all in violation of Title 18, United States
Code, Section 1349; six counts of failing to certify financial reports,
in violation of Title 18, United States Code, Section 1350(c)(1); one
count of securities fraud, in violation of Title 18, United States
Code, Section 1348; three counts of wire fraud, in violation of Title
18, United States Code, Section 1343; four counts of lying to
accountants, in violation of Title 15, United States Code, Sections
78m(b)(2)(B) and 78ff and 17 C.F.R. 240.13b2-2; and one count of
obstructing and impeding the due administration of the Internal Revenue
Service, in violation of Title 26, United States Code, Section 7212(a).
According
to the Indictment, Huff was the Chief Executive Officer (“CEO”) of
GlobeTel Communications, Inc. (“GlobeTel”), a Fort Lauderdale-based
corporation formerly listed on the American Stock Exchange. As CEO,
Huff oversaw the operations of the entire company. GlobeTel represented
that it was in the business of providing telecom services, primarily
involving Internet telephone services using Voice over Internet
Protocol equipment. GlobeTel purported to provide these services on an
international basis through “hubs” in foreign and domestic locations.
As
further alleged in the Indictment, Huff directed and participated in a
scheme to falsely inflate GlobeTel’s revenue from May 2002 to June
2006. The scheme involved the creation of fraudulent invoices that
appeared to be worth millions of dollars and to report fictitious
transactions between GlobeTel and telecom companies to buy and sell
telecom “minutes.” In fact, however, GlobeTel never bought or sold
anything related to those invoices. Huff allegedly lied to the
company’s outside auditors, and provided the falsified general ledger
and created fraudulent CDRs to corroborate the fraudulent invoices.
To
perpetuate the scheme, Huff caused Globetel to issue periodic SEC
reports, registration statements, and press releases that misled
investors by materially misstating GlobeTel’s financial results for the
third quarter of 2002 through the end of 2004. These false reports and
statements listed more than $20 million in fraudulent revenue during
this period.
The Indictment further
alleges that Huff concealed his income and assets from the IRS. Huff is
charged with under-reporting his income on his Form 1040, U.S.
Individual Income Tax Return, for tax years 2001, 2002, 2003 and 2004
by $416,000, $18,748, $44,597.81, and $630,000, respectively. Huff did
not file a tax return for GlobeTel Brazil, LLC for the years 2003, 2004
and 2005.
If convicted, Huff faces the
following statutory maximum terms of imprisonment: 20 years on the
conspiracy charge; 10 years on each count of failing to certify
financial reports; 25 years on the securities fraud charge; 20 years on
each count of wire fraud; 20 years on each count of lying to
accountants; and three years on the obstruction count.
Mr.
Sloman commended the investigative efforts of the Internal Revenue
Service, Criminal Investigation Division, and the Federal Bureau of
Investigation. This case is being prosecuted by Assistant U.S. Attorney
Thomas P. Lanigan and Trial Attorney Gregory R. Bockin of the
Department of Justice’s Tax Division.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the
United States Attorney’s Office for the Southern District of Florida at
www.usdoj.gov/usao/fls.
Related court documents and information may be found on the website of
the United States District Court for the Southern District of Florida
at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.
